We'll always have Paris, Travelzoo (NAS: TZOO) .

The travel-deals publisher posted disappointing quarterly results this morning, even though strong growth in Europe is partly offsetting the sting of an uninspiring performance closer to home.

Revenue climbed a mere 6% to $39.3 million, short of the 14% top-line spurt that analysts were targeting. Adjusted earnings, on the other hand, clocked in at $0.42 a share -- ahead of both the $0.37 a share it served up a year earlier and the $0.41 a share in net income that Wall Street was projecting.


It's a story of two different continents here.

North American revenue climbed just 4%, and adjusted operating income fell from $9.3 million to $7.1 million. If it wasn't for Travelzoo's push for local deals, travel revenue actually would've slipped 4%. Things are looking far better in Europe where revenue climbed 17% and adjusted operating income more than tripled.

The problem is that North America accounts for 72% of the company's 21.8 million subscribers and for 73% of its revenue.

Add it all up and Travelzoo is not the same performer it was just three months ago when revenue climbed 23% in its holiday quarter and profitability grew even faster.

The softness could explain why sources were telling Reuters last week that the company was in the process of hiring a financial advisor to explore strategic alternatives, which may include a sale of the company.

"We provide no comment on this topic," was the company's response during the call. For those scoring at home, this is not a denial. The smart money has to be on the company putting itself up for sale sooner rather than later.

There is potential in Travelzoo's picky approach to following Groupon (NAS: GRPN) into selling pre-paid vouchers for discounted travel, dining, and spa experiences. Unlike Groupon and its fractured financials, Travelzoo is generating profitable revenue growth in this niche with operating margins of 24%.

Cracking the daily-deals code that continues to puzzle Groupon may be reason enough for Travelzoo to smoke out a buyer willing to pay a reasonable premium if it does indeed officially put itself into play. There's definitely a good argument for priceline.com (NAS: PCLN) -- after apparently failing to duplicate Travelzoo's success with its PriceBreakers missives -- making a play on Travelzoo. Another company to watch is Yahoo! (NAS: YHOO) . The cash-rich (but growth-poor) dot-com giant may have commented about cutting dozens of segments loose earlier this week, but it could try to overcome its failure in acquiring Groupon a couple of years ago by snapping up a company that is managing daily deals campaigns profitably.

Either way, Travelzoo's ho-hum quarter can be seen as an indication that it has hit the point where it needs a larger dot-com to take it to the next level.

Feed the bears
Travelzoo has been a disappointment since I recommended it to Rule Breakers newsletter subscribers until this morning's pop, so now may be a good time to discover the next Rule-Breaking multibagger. It's a free report. Want it? Get it.

At the time this article was published Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story, except for Travelzoo. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.The Motley Fool owns shares of Yahoo. Motley Fool newsletter services have recommended buying shares of Travelzoo, Yahoo, and priceline.com. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

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